Patent Reform--A Tax On Innovation?

The enactment of the Leahy-Smith America Invents Act on September 16, 2011 means that a 15% surcharge on most patent office fees will take effect on September 26, 2011. (The USPTO has published the new fee schedule on its Leahy-Smith America Invents Act Implementation website). But, with no new appropriations, the USPTO will not be permitted to spend this money. Rather, it will go into the U.S. treasury’s general fund, further compounding the problem of fee diversion.

Although patent reform places significant new demands on the USPTO, there is talk of funding the USPTO under another “continuing resolution” for the new fiscal year that begins October 1, 2011. If the USPTO is not permitted to spend all of the (higher) fees it collects, it may be forced to pull resources from examination in order to meet the new statutory mandates.

The net effect of higher USPTO fees, increased demands on the USPTO, and a static or reduced USPTO budget will be a new tax on patent applicants–hardly the job-creating, innovation-promoting patent reform that we were promised.

President Obama certainly made a difference in the passage of this bill, in the process also significantly raising the profile of the patent world and its issues. It’s too bad that Congress didn’t do its part by enacting the bill that almost everyone else wanted — one that would have ended the diversion of USPTO fees to the legislature. But then, I guess that’s what happens when you let foxes guard the henhouse.